It would have been a dream come true: getting your money back for an acquisition gone wrong.
In 2015, Slater & Gordon (S&G) acquired the Professional Services Division (PSD) of Quindell in the UK for A$1.225 billion (at the then exchange rate) plus earnout arrangements.
Before the end of that year, S&G wrote off $814 million of goodwill from this acquisition. This eventually led to the wipeout of shareholder value and almost extincted the company.
The solution: sue the vendor – now known as Watchstone Group – and get back that billion dollars.
In the lead-up to the acquisition, S&G emphasised that it conducted a very thorough due diligence. This may have worked against it in its claim. On the eve of the trial, S&G and Watchstone settled for a mere £11 million payment to S&G with neither side admitting liability.